Dow Jones futures fell, while S&P 500 and Nasdaq 100 futures were higher Wednesday ahead of details of President Biden’s $2 trillion infrastructure package. Apple, Boeing and Tesla stock were set to rally, while Lululemon dropped on earnings.
Among the Dow Jones leaders, Apple (AAPL) rallied 1.5% premarket Wednesday, while Microsoft (MSFT) moved up 0.5% in today’s stock market. Boeing (BA) remains in buy range following Monday’s bullish move and rallied 1% in morning trade.
Dow Jones Futures Today: Biden Infrastructure Plan
Ahead of the stock market open Wednesday, Dow Jones futures edged lower vs. fair value, while S&P 500 futures rose 0.15% vs. fair value. Nasdaq 100 futures traded up 0.6% vs. fair value.
On Wednesday, Biden is set to unveil a $2 trillion spending package focused on boosting infrastructure. The plan will raise the corporate tax rate from 21% to 28% to help pay for it.
Early Wednesday, the 10-year Treasury yield eased to 1.719% after hitting a 14-month high on Tuesday at 1.765%.
Among exchange traded funds, the Innovator IBD 50 (FFTY) rose 2.4% Tuesday. Nasdaq 100 tracker Invesco QQQ Trust ETF (QQQ) rallied 0.5% early Wednesday, while the SPDR S&P 500 ETF (SPY) edged lower in premarket trade.
Stock Market Rally: Nasdaq Set For Another Test?
Amid the current stock market rally, the Dow Jones Industrial Average eased from all-time highs Tuesday, while the S&P 500 index declined for a second straight day.
Meanwhile, the tech-heavy Nasdaq remains below its key 50-day moving average. The Nasdaq will need to overcome this key hurdle in order to maintain its upward trajectory. The 50-day line is a critical potential resistance level. If the Nasdaq decisively clears it, then new highs could be on the horizon.
Tuesday’s Big Picture commented, “Giddy optimism has certainly fallen since the highflying days of GameStop (GME), AMC Entertainment (AMC), BlackBerry (BB) and other beaten-down names that became the rallying cry of WallStreetBets on Reddit. The put-call volume ratio has recently jumped to 0.76 from its year-to-date low of 0.46. This means for every 100 buyers of bullish calls, 76 bearish puts got traded. Some observers believe call option buying has subsided, pushing up this ratio.”
Despite a resumed uptrend, the stock market’s choppiness has made it hard to make progress. Given such difficulty, it’s best to maintain a more conservative stance until the market proves its recent strength isn’t fleeting.
Bitcoin hit its high-water mark on March 13, topping out at $61,556. The price fell about 2% Wednesday to trade around $57,800, according to CoinDesk.
The Grayscale Bitcoin Trust (GBTC) looked to continue its rebound from the 50-day moving average following Tuesday’s 2.8% rally.
Dow Jones Stocks: Boeing
Inside the Dow Jones Industrial Average, Boeing is trading at the top of the buy range above a 244.18 buy point in a cup base. The 5% buy range goes up to 256.39. Shares rallied about 0.7% premarket Wednesday.
Boeing was featured as Monday’s IBD Stock Of The Day.
Stocks Near Buy Zones: Alphabet, Facebook
IBD Leaderboard stock Alphabet continues to form a flat base with a new buy point at 2,145.24, according to IBD MarketSmith chart analysis. Shares are about 5% away from the new entry amid Tuesday’s slight gain. The stock moved up 0.3% premarket Wednesday.
According to Leaderboard commentary, “Alphabet has made better progress than other big-cap techs lately. Support at the 21-day line is now flimsy. Watch for the stock to find support as it tests the 50-day line. The last base was second stage.”
Fellow FANG stock leader Facebook is tracing a cup with handle with a 299.81 buy point. Shares moved down 1% Tuesday and are about 4% away from the new entry. Early Wednesday, Facebook stock rose 0.5%.
According to IBD Stock Checkup, FB stock shows a solid 91 out of a perfect 99 IBD Composite Rating. The IBD Composite Rating helps investors easily measure the quality of a stock’s fundamental and technical metrics.
Stock Market Earnings: Chewy, Lululemon
Chewy reported strong Q4 results late Tuesday that beat estimates. The online seller of pet food reported an adjusted profit of 5 cents a share on revenue of $2.04 billion.
CHWY stock jumped 10% early Wednesday, but is still far from its old highs.
After the stock market close Tuesday, Lululemon topped fourth-quarter estimates, but gave mixed full-year guidance.
LULU stock declined nearly 2% in premarket trade. Shares ended Tuesday more than 20% off their 52-week high and below their 50-day line.
Tesla stock rallied over 1% premarket Wednesday, on pace to add to Tuesday’s 4% gain.
Shares of Tesla ended Tuesday about 29% off their 52-week high. Tesla stock could be forming a new base, but it is too early for a new risk-optimal buy point.
On Feb. 22, Tesla broke down through its key 10-week moving average line, a critical support level. On Jan. 25, Tesla stock hit a record high at 900.40, after climbing as much as 93% from a 466 buy point in a cup
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple rallied about 1.5% premarket Wednesday, on pace to snap back from Tuesday’s 1.2% fall. Apple stock is rebounding from its 40-week line and could soon again try to reclaim its 10-week line.
On Feb. 18, Apple stock triggered the 7%-8% loss-cutting sell rule when it fell more than 7% below its 138.89 buy point in a cup with handle.
Meanwhile, software giant Microsoft moved up 0.5% premarket Wednesday. Shares are back above their 232.96 buy point and are approaching a 246.23 buy point in a new flat base.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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